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18 March 2011
The overall markets, which had started 2011 off on pretty solid footing, has taken a few punches so far this month. The uncertainty surrounding the tragic events in Japan weigh on the markets, in particular, the international and emerging markets. As prudent investors, we must realize that there are always events that we cannot anticipate that will affect the market. Just another reason to continue to hold well diversified portfolios of low cost mutual funds to help us weather the storms. Positive thoughts for peace and stability go out to all the Japanese citizens and all those who have been impacted by this natural disaster.
With respect to a previous issue that could have been a disaster, the municipal bond market seems to have stabilized for now. There has been a mass exodus out of the market on behalf on individual investors, followers of the herd mentality, who feared the worst when negative headlines hit--it wasn't actually even a negative headline, just a bank anayst with supposed detailed analysis she couldn't divulge. I'm not saying there won't be some problems in the muni market, but it seems to me for the first time in decades, municipalities are finally getting serious about their budgets, about future pension and health care payouts and finally getting realistic about their financial situations in general. The bottom line is, there is no other investment that shelters income for those in the higher tax brackets so let's expect some bumps along the way but know in the end that the managers of the municipal bond funds owned are choosing individual bonds correctly.
Instead of giving you the month end return numbers, I have updated them through the close of business 3/17/2011.
Name Total Return Month to date Total Return Year to date Total Return 12 months
Russell Mid Cap 400 (3.40) 2.40 17.88
S&P SmallCap 600 Index (3.84) 0.55 15.87
SPDR S&P 500 Index (3.97) 1.58 10.75
BarCap US Aggregate Bond Index 0.66 1.03 5.22
MSCI EAFE USD Index (International stocks) (6.87) (1.77) 2.27
Emerging Markets Index (VWO) (1.67) (5.17) 10.55
